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Details from Boeing Dreamlifter lawsuit

Boeing’s fourth and final Dreamlifter enters service on Tuesday, Feb. 16, 2010, taking off from Everett on a flight to Wichita, Kan. (Boeing)

Following up on Thursday’s short report that Oregon’s Evergreen International Airlines had sued Boeing over the cancellation of its contract to operate the Dreamlifter, here are some details from the complaint.

“Boeing committed bad faith and breached its contractual promises to conduct its business fairly, impartially and in an ethical and proper manner,” Evergreen alleged in the complaint, filed Thursday in U.S. District Court in Seattle. “Boeing’s bad faith and breach of contract have caused lost profits to Evergreen in excess of $175 million.”

Boeing declined to comment Friday.

Boeing granted Evergreen the contract for the Dreamlifter, which transports parts for the 787 Dreamliner, in 2005. The initial five-year contract was set to automatically renew for another five years (with two more five-year options after that) except in certain specific circumstances.

The lawsuit said: “Evergreen received notification that Boeing was ‘investigating other options’ in ‘light of current business realities.’”

In fact, Boeing started secretly negotiating with Atlas Air Inc., to transfer the contract to Atlas as compensation for delays in the 747-8 Freighters Atlas has on order, Evergreen said in the complaint. “Boeing dropped Ever
green in favor of Atlas to avert the multimillion dollar disaster that was looming over the 747-8 program.”

Atlas has 12 747-8 Freighter on order, with options for another 14, Evergreen noted in the lawsuit. “A Boeing employee informed an Evergreen employee that Boeing’s liability for penalties to Atlas approached $1 billion. By at least October 2009, Atlas had made a claim with Boeing for refunds resulting from Boeing’s failure to meet delivery guarantees to Atlas.”

While either party could cancel the contract, “the right was subject to both and express and implied covenant of good faith and fair dealing,” Evergreen said in the complaint. “Accordingly, based on the express language of the contract, Evergreen reasonably expected that, absent bad faith conduct on Boeing’s part or cause for default by Evergreen, the (Dreamlifter) contract would last 20 years based upon ‘automatic,’ five-year, renewals of the (Dreamlifter) contract.”

Evergreen said Boeing also:

Breached contractual duties by misleading it into providing confidential and proprietary internal reports that Boeing passed on to Atlas;

Has demanded that Evergreen help transfer the program to Atlas, despite admitting that Evergreen’s contract has no such obligation;

Has demanded that Evergreen provide Boeing and Atlas with “an enormous volume of highly confidential, proprietary, and trade secret information, a demand to which no reasonable company would capitulate.”

Two years of delays in Boeing’s 787 program also hurt Evergreen, which was paid based on actual flight hours but incurred “considerable expense” for Dreamlifter readiness, according to the complaint.

In fact, the switch to Atlas raises risks to the 787 program, Evergreen said in the lawsuit. “Evergreen is the only company in the world with any experience operating, maintaining, and performing the ground handling for the Dreamlifter airplane. Having already experience years for delay, by switching to Atlas, Boeing is jeopardizing the 787 program.”

Boeing never comments publicly to such litigation, spokesman Dean Tougas said Friday. “We’ll review the litigation and we’ll respond through the appropriate legal channel.”

Asked specifically about the idea that Boeing switched the contract as a payoff for 747-8 Freighter delays, he said: “We’re not going to comment on our contractual dealings with our suppliers.”

Note: This is a seattlepi.com reader blog. It is not written or edited by the P-I. The authors are solely responsible for content. E-mail us at newmedia@seattlepi.com if you consider a post inappropriate..